The Daily Dow
 Friday, October 31, 1997
by Robert Sheard

LEXINGTON, KY. (Oct. 31, 1997) -- A lot of readers have asked if there's a way to supplement the selection of stocks from the Dow Dividend Approaches with similar stocks from outside the Dow 30. For good reason, some investors prefer not to limit themselves to four or five stocks. After all, if you suffer a 25% loss in one of your four stocks, that's a 6.25% hit to your entire portfolio. But if you hold ten stocks and one of them gets skinned by 25%, your total loss is only 2.5%, medicine that's a little easier to swallow. But no one wants to sacrifice returns, either.

Of course, we already have one variation, developed by Ethan Haskel (Cormend), Beating the S&P. But here's another screening suggestion, brought to you courtesy of Foolish reader JaguarDL. Start with stocks that have a market capitalization of at least $10 billion. Using the Value Line database, that brings up 168 U.S. companies.

I skipped the utilities, phone companies, and railroads in my list, and then sorted what was left by dividend yield. The following thirty are the top-yielding stocks from that list, listed here with their industry groups and dividend yields:

4.48 Chrysler (C) Auto
4.05 Philip Morris (MO) Tobacco
3.87 Penney (J.C.) (JCP) Retail
3.86 Dow Chemical (DOW) Chemical
3.68 Ford Motor (F) Auto
3.56 Atlantic Richfield (ARC) Oil Integ
3.40 Pharmacia & Upjohn (PNU) Drug
3.22 PNC Bank Corp. (PNC) Bank
3.18 Gen'l Mills (GIS) Food Proc
3.11 Texaco Inc. (TX) Oil Integ
3.08 Morgan (J.P.) & Co (JPM) Bank
3.05 Amoco Corp. (AN) Oil Integ
3.00 Fleet Fin'l Group (FLT) Bank
2.94 Gen'l Motors (GM) Auto
2.94 Banc One Corp. (ONE) Bank Mid
2.93 Mobil Corp. (MOB) Oil Integ
2.91 Eastman Kodak (EK) Instrmnt
2.87 National City Corp. (NCC) Bank Mid
2.87 Chevron Corp. (CHV) Oil Integ
2.84 Phillips Petroleum (P) Oil Integ
2.78 Marsh & McLennan (MMC) Ins Divrs
2.75 Amer. General Corp. (AGC) Ins Divrs
2.72 Exxon Corp. (XON) Oil Integ
2.71 KeyCorp (KEY) Bank
2.69 Heinz (H.J.) (HNZ) Food Proc
2.61 Anheuser-Busch (BUD) Alco-Bev
2.60 First Union Corp. (FTU) Bank
2.59 CoreStates Fin'l (CFL) Bank
2.57 Mellon Bank Corp. (MEL) Bank
2.49 NationsBank Corp. (NB) Bank

Instead of choosing the top ten directly, though, JaguarDL recommends limiting yourself to one stock per industry group. That would give you a diverse ten-stock portfolio consisting of the following today:

Chrysler
Philip Morris
J.C. Penney
Dow Chemical
Atlantic Richfield
Pharmacia & Upjohn
PNC Bank
General Mills
Eastman Kodak
Marsh & McLennan

This approach makes perfect sense to me. Face it; there are a number of ways to skin the large-cap / high-yield cat. As long as you begin with a large-cap group of industrial stocks, you stand a reasonable chance of success by focusing on those with the highest yields.

So if you're looking for a few companions for your Dow High yielders, consider picking up some of the Dow's first cousins using a screening approach like Beating the S&P or JaguarDL's "beating the market" approach. Have a Ghoulishly Foolish weekend.

And don't forget to check out the Current Dow Order and the 1997 Dow Returns.

(c) Copyright 1997, The Motley Fool. All rights reserved. This material is for personal use only. Republication and redissemination, including posting to news groups, is expressly prohibited without the prior written consent of The Motley Fool. ________________________________

TODAY'S NUMBERS
Stock  Change   Last
--------------------
T    +   3/4   48.94
GM   -1 13/16  64.19
CHV  +2  7/16  82.94
MMM  -  11/16  91.50

           Day   Month    Year
                  Day   Month    Year
        FOOL-4   +0.55%   2.90%  19.54%
        DJIA     +0.82%  -6.33%  15.41%
        S&P 500  +1.21%  -3.45%  23.47%
        NASDAQ   +1.48%  -5.46%  23.44%

    Rec'd   #  Security     In At       Now    Change
   1/2/97  153 Chevron       65.00     82.94    27.60%
   1/2/97  479 AT&T          41.75     48.94    17.22%
   1/2/97  179 Gen. Motor    55.75     64.19    15.13%
   1/2/97  120 3M            83.00     91.50    10.24%


    Rec'd   #  Security     In At     Value    Change
   1/2/97  479 AT&T       19998.25  23441.06  $3442.81
   1/2/97  153 Chevron     9945.00  12689.44  $2744.44
   1/2/97  179 Gen. Motor  9979.25  11489.56  $1510.31
   1/2/97  120 3M          9960.00  10980.00  $1020.00


                             CASH   $1167.51
                            TOTAL  $59767.57